For Immediate Release: November 15, 2022
Note: Current NHRS retirees and beneficiaries who do not wish to make changes to their federal tax withholding elections are not required to file a new form.
CONCORD, NH – To match individuals’ withholding instructions to changes in tax law, the IRS has redesigned tax withholding forms for both monthly pensions and annuities and one-time payments and rollovers.
The revised Form W-4P (Withholding Certificate for Periodic Pension or Annuity Payments) and a new Form W-4R (Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions) include substantial changes to the federal tax withholding elections available. Use of these forms was optional for tax year 2022, however the IRS requires that the new forms must be used beginning January 1, 2023.
NHRS members retiring on or after January 1, 2023, should use the revised Form W-4P. Members who terminated employment and want to withdraw or roll over their member accumulated contributions on or after January 1, 2023, will use Form W4-R if they want to adjust the standard withholding.
NHRS retirees and beneficiaries who already receive monthly benefit payments and who do not wish to make changes to their federal tax withholding elections are not required to file a new form. Retirees and beneficiaries may change their withholding option at any time by submitting a new W-4P to NHRS.
A major change to the W-4P form is that filers will no longer be able to adjust their withholding by electing a specific number of withholding allowances. Previously, federal tax withholding calculations for pensions and other eligible periodic payments were based on the filing status (married or single) and number of withholding allowances reported. The revised form has new input fields for increasing or decreasing the amount to withhold, including fields for tax credits and deductions.
While the calculation method is more complex, the IRS maintains that, when completed correctly, the new form will more accurately approximate the amount of tax due at the end of the year.
SUMMARY OF CHANGES FOR IRS FORM W-4P
1. You may now select one of the following marital status options:
Single or Married filing separately
Married filing jointly or Qualifying widow(er)
Head of household
2. Captures income from multiple jobs/pensions/annuities.
3. Claim dependent and other credits.
4. Default withholding is now Single with no adjustments (changed from Married with three (3) allowances). Note: If you choose to not have income tax withheld, you may indicate “no withholding” under Step 4(c).
See IRS Publication 15-T at irs.gov for more information: https://www.irs.gov/pub/irs-pdf/p15t.pdf
If you need additional assistance in estimating your tax, you should consult with a tax advisor or the IRS. NHRS cannot assist you in computing your estimated federal income tax.
Please be advised that, if you elect to have no federal income taxes withheld or if you do not have sufficient federal income tax withheld from your retirement benefits, you may be responsible for payment of estimated tax.
NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries. The State of New Hampshire and nearly 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers. NHRS has approximately 48,500 active members and 41,000 benefit recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code.
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